Report: PC industry will see biggest decline ever in 2009

Gartner reports PC industry will suffer an 12 percent decline in shipments.

Along with much of the rest of the economy, the PC industry will be singing the blues this year, with worldwide shipments declining to 275 million units -- or almost 12 percent -- from 2008, according to a new Gartner report.

The study projects the worst decline in PC shipments since Gartner began keeping statistics in 1990, research director George Shiffler told The Standard. The second-worst decline occurred in 2001, when shipments contracted a mere 3.2 percent.

Poor desktop PCs sales are projected to account for much of the decline. In 2009, desktop shipments will contract a whopping 31.9 percent. Laptop shipments will increase 9 percent from 2008, but this is due mainly to the continued growth of netbooks, a popular new subcategory of portable computers. Not counting netbooks, mobile PCs are expected to grow only 2.7 percent this year, the report said.

One reason desktop vendors are having trouble is that people are hanging onto their computers longer in these lean economic times, Shiffler explained. Currently, desktop PCs are kept for about five years, up from four years, and laptop owners keep their portables for a little over three years, a shorter time mainly because of breakage. This reluctance to part with old PCs hurts PC vendors the most in mature markets, where it's estimated that 80 percent of all shipments replace an existing computer, Shiffler said.

What's in store for the PC industry beyond 2009? Windows 7 might not give PC sales a boost until 2011 or later, said Shiffler. On the other hand, the current downturn should not result in any major PC vendors exiting the business, he said.

"A couple of Japanese companies — I can't say who — are already starting to pull back," he said. "This is a pretty nasty business and margins are thin; you have to have a pretty efficient supply chain to survive. It's going to be tough for everybody. But none of the big guys will go away."

According to the report, netbooks are a lone bright spot, forecast to nearly double in sales over the coming year. But even that substantial growth won't be enough to lift the PC industry out of its malaise.

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Carla Thornton

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